January 26, 2001, 5:46 PM — Still lost in much of the hype surrounding e-commerce applications is the need for reliable, easily implemented application integration. But the stakes are high for developers and businesses.
Online spending within e-communities will skyrocket to a whopping $1.2 trillion worldwide in 2004, according to estimates from Framingham, Mass.-based market research company IDC. As a result, IDC said that businesses have tremendous potential to increase their revenues through these communities.
But for most companies, taking advantage of e-marketplaces will require integrating their e-business applications with the rest of their infrastructures and throughout the supply chain.
Application integration isn't easy. When e-commerce applications, particularly those involving transactions worth thousands of dollars, are added to the scenario, things become more complex than they might already be. And getting it right is crucial.
EDI (electronic data interchange) has worked in the past, but only for large companies with deep pockets, and its use had been limited primarily to interenterprise information exchanges.
EDI is expensive, and the cost has plagued smaller companies. Typically, a large company with an EDI infrastructure will have smaller partners that may use a Web browser to access, for instance, supply-side data. Such a solution may suit that purpose, but it is not data integration.
When the large retailer with EDI capabilities in place puts an order in to a third-or fourth-tier supplier that does not have an EDI system, the large retailer has no way of knowing if the supplier has the needed inventory in stock; in other words, there is no guarantee that the order will be filled.
If the data is integrated between both companies, however, the retailer could access inventory data and, if the order cannot be filled immediately, request the inventory from a different supplier.
"Companies want to be able to automate that data as deeply as they can, and to enable bidirectional integration into both companies," said Jon Derome, a senior analyst at the Yankee Group, in Boston.
To help customers integrate their EDI and XML data, Denver-based New Era of Networks (NEON) last week announced its PaperFree EDI Adapter, which provides an easy connection between XML and EDI formats.
Although EDI certainly isn't going away, the industry seems to have agreed on XML as the glue that bonds together disparate systems.
"One of the big benefits of XML in e-commerce is that it is going to level the playing field and let smaller companies that don 't have EDI communicate with larger companies," said Chris Silva, associate research analyst at IDC.
To help developers realize that level playing field, a number of vendors are making XML easier for developers to use.